Egyptian Central Bank Rate Cut – Currency Thoughts

Egyptian Central Bank Rate Cut

December 26, 2025

Monetary officials at the Central Bank of Egypt implemented their fifth interest rate cut of 2025 and signaled that more downward moves next year will be likely. The new main operating rate of 20.5% will be flanked by an overnight lending rate of 21.0% and an overnight deposit rate of 20.0%. Each is a full percentage point lower than previously, and the cumulative decline since April amounts to 725 basis points. Inflation is targeted at 7% within a 5-9% corridor, and officials anticipate a return to target by this time next year. Several risks to projected growth of around 5% within the desired restoration of in-target inflation among which are relatively persistent non-food inflation, the impact of pro-growth fiscal policy, and continuing global geopolitical tensions. CPI inflation in Egypt peaked in September 2023 at 38.0% and averaged 28.3% in 2024 before falling to a 42-month low of 11.7% this past September and, more recently, printing at 12.3% last month.

Copyright 2025, Larry Greenberg. All rights reserved.

Tags: Central Bank of Egypt

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